PETALING JAYA: Digital Nasional Bhd (DNB) and Telekom Malaysia Bhd
(TM) are locking horns over access agreements between the two, with the situation possibly heading to the courts.
Yesterday, DNB, which was created back in 2021 by the government to be the sole 5G infrastructure provider, said its access agreement with TM is still in force despite the latter announcing last week that it sought an early exit from that.
In a quick response, TM disputed this, saying in a statement that its termination of the 5G access agreement with DNB is valid.
Both parties said they will pursue the appropriate processes under DNB’s access provisions but also alluded to safeguarding their interests under the law.
The tussle is yet another problematic development in Malaysia’s 5G rollout under the 2021 single wholesale network framework which created DNB as an entity wholly-owned by the Minister of Finance (MoF) Inc.
In 2024, the government opted to have a dual-network 5G, which was highly contested by all telcos including Maxis Bhd and CelcomDigi Bhd. However, the award of the second 5G infrastructure licence went to U Mobile Sdn Bhd.
U Mobile is also wrapped up in the latest saga, as TM, following its attempt to wrangle itself out of the access agreement with DNB, opted to sign up with U Mobile last week.
If TM is not allowed to leave the DNB fold, it may struggle to fulfil what it has signed up for with U Mobile, a move which could also jeopardise the latter’s viability as a second network provider.
Tradeview Capital fund manager Neoh Jia Man said DNB’s move did not come as a surprise as “no one really expected U Mobile to be able to gain such a customer (referring to TM) to begin with”.
Neoh noted that given that the government still has a golden share in DNB, “there is a big chance that TM’s plan to exit may not go through”.
“Moreover, this move (by TM to exit DNB and sign up with U Mobile) is also subject to The Malaysian Communications and Multimedia Commission’s (MCMC) approval. The regulator could reject it before the matter even goes to the courts,” he told StarBiz.
Neoh also cautioned that the matter could still become prolonged and protracted, as much would depend on the specific terms and interpretation of the wholesale access agreement between TM and DNB.
In December 2025, MoF exercised its put option, requiring the other shareholders, namely CelcomDigi, Maxis and YTL Power International Bhd to take over its stake and existing shareholder loans at RM327.87mil.
Putrajaya will retain a 30% share in DNB alongside a golden share. At the same time, the government also owns a golden share in TM.
A golden share is a special share that gives the holder extra control rights like veto powers over major decisions like sales or management changes, even if its economic stake is small.
DNB’s net loss totalled to RM1.2bil in the financial year ended December 2024 (FY24), with total liabilities of approximately RM4.9bil, as telcos paid only nominal access fees.
DNB is expected to remain loss-making in FY25 and FY26 due to uncertainty over revenue growth and cost controls.
“Based on our estimates, TM contributes roughly RM35mil per annum in access fees to DNB. DNB’s reported revenue was about RM340mil in 2024, so TM accounts for slightly over 10% of total revenue.
“While that may not appear significant on the surface, given DNB’s losses of RM1.2bil in 2024, any reduction in wholesale revenue would be meaningful to its bottom line,” he said.
Neoh noted that under the current ownership structure, any further losses would have to be borne equally by the remaining shareholders following the government’s partial divestment.
“This is why DNB would naturally want TM to remain on its network. Losing a wholesale customer of that scale could affect its financial viability going forward,” he said.
Further, these developments come amid lingering market speculation that Maxis could eventually acquire U Mobile, although recent reports suggest earlier talks may have stalled over valuation concerns.
Last week, U Mobile’s two major shareholders — Tan Sri Vincent Tan Chee Yioun and Tunku Tun Aminah Sultan Ibrahim – secured RM3.8bil in financing from local banks to acquire a controlling stake in the company from Singapore’s Straits Mobile Investments Pte Ltd, which is ultimately owned by Temasek Holdings.
The move has been interpreted by some industry observers as a signal that the local shareholders intend to scale U Mobile independently rather than sell.
However, one analyst said the materialisation of such a deal cannot be ruled out.
He noted that if Maxis were to be able to acquire U Mobile, there is a possibility that Maxis could exit DNB.
“As such, DNB may have a stronger reason to hold on to TM to preserve its revenue base. It is more efficient to spread fixed network costs across a larger subscriber base, so retaining more wholesale customers helps improve overall economics,” he said.
Meanwhile, BIMB Securities analyst Azim Faris Ab Rahim is of the view that TM will eventually make the switch to U Mobile.
“This is because it has already guided that it is ready to forfeit RM127.3mil, being payment made as deposit or prepayment to DNB.
“It just may take a while before that can happen,” he said.
TM’s argument on the validity of its decision to shift out of DNB is that its 5G access agreement with DNB, dated Oct 30, 2022, allows the group to terminate the contract within 30 days once 5G services are commercially available from another operator. TM said that condition was met on Jan 26, 2026, when U Mobile launched its 5G services and issued a reference access offer (RAO) — a formal wholesale pricing and access framework that signals commercial readiness.
The issuance of the RAO effectively allowed TM to trigger its contractual termination option.
However, exiting the agreement comes with financial implications, something that TM said it can contend with.
As at Dec 31, 2025, TM has RM127.3mil in unused prepaid capacity under the DNB agreement.
By proceeding with the termination, the group is effectively foregoing access to that prepaid capacity.
TM has issued a letter of award to U Mobile for a three-year usage-based 5G services contract, which U Mobile accepted last week.
